In an effort to preserve existing restaurants in downtown Santa Monica, city officials hope to limit retail use with an ordinance that was adopted Tuesday, January 24th.

The Santa Monica City Council established a discretionary review process to regulate the conversion of ground-level restau- rants adjacent to the Third Street Promenade to a new or expanded retail use.

The ordinance would essentially prohibit new retail frontage on two of three blocks on the Third Street Promenade.

Retailers have limited opportunity on the third block, which is closest to the Santa Monica Place mall.

In this third block, a proposal to convert any front portion of a ground-floor restaurant to a new or expanded retail use would trigger a conditional use permit (CUP) process.

“If we leave the restaurants unprotected, we risk losing the whole enchilada,” said Santa Monica Councilman Kevin McKeown.

City officials want to retain a mixture of land uses such as dining, retail and entertainment on the Promenade, but restaurants are closing doors because of high rents, competition and lack of demand.

“Maintaining restaurant uses on Third Street contributes significantly to the Promenade’s success and supports existing retail and entertainment uses in the area,” said Andy Agle, interim director of the Santa Monica Planning and Community Development Department.

“It is important to continue to regulate the potential loss of restaurants and continue the vision of the Promenade as a unique destination with a diversity of uses,” Agle said.

In addition to meeting existing requirements to obtain a conditional use permit, an applicant who wants to convert a restaurant would have to make an additional finding. That finding can only be reached if the proposed new retail use preserves the Promenade’s unique mix of restaurants, retail, and entertainment.

A second finding was included in the ordinance, but the City Council dropped it because its language was vague.

The second finding would have required permit applicants to show that the proposed new retail use provides goods or services that are not adequately available on the Promenade.

“What if some special store starts to morph into something else?” asked Santa Monica Councilman Ken Genser. “How do we enforce this condition or prevent someone from using this provision in a deliberately devious way?”

Genser envisioned a scenario in which future members of the Planning Commission or the City Council could overreach to make findings that would allow a new store on the Promenade because the store sells a unique product even if existing stores sell the same — but not unique — type of products.

“You have a legal right to preserve the balance or mix of the kinds of businesses on the Promenade,” said Santa Monica city attorney Marsha Moutrie.

“I am not sure that there is a dependable way for the city to pick between stores, let’s say bookstores, based on the preference that one bookstore is more unique than a chain bookstore,” she said.

The City Council asked city staff to review a list of recommendations from the Bayside District Corporation.

Councilmembers indicated that they want to see another ordinance in five to six months.

Members of the Bayside District Corporation — the nonprofit city agency that manages the Third Street Promenade — recommended flexibility to convert businesses and dropping the conditional use permit.

“Putting in the cement and trying to freeze-frame what we have on the Promenade is not healthy for the district, because all successful pedestrian areas should be able to evolve,” said Bill Tucker, chair of the Bayside board of directors.

“Staff’s recommendation would require a restaurant conversion to go through an expensive and uncertain CUP process. This action only promotes deep-pocket retail tenants. The outdoor dining ambiance goal can be achieved while still being flexible and fair,” Tucker said.

Tucker has an ownership interest in two buildings in downtown Santa Monica that have restaurants in them.

“The key is tracking the dining rather than the retail,” said Jennifer Hranilovich, a member of the Bayside board of directors. “The previous ordinance and the suggested ordinance are both inflexible, onerous, and unnecessary to maintain goals for the Promenade.”

Hranilovich said the City Council should drop the conditional use permit process for restaurant conversion because it creates a lot of red tape.

The previous ordinance that Hranilovich referred to was an interim ordinance the City Council adopted in 2001, which would have expired in two months.

The ordinance adopted last week maintains much of the interim ordinance and adds new requirements for a conditional use permit process.

“Essentially, what we are doing is keeping the content of the interim ordinance in place with the exception that there be opportunity for discretionary review for conversion,” Agle said.